Overview
Arch believes that its long-term success will be enhanced by achieving excellence in mine safety and environmental stewardship; conducting business in an ethical and transparent manner; investing in its people and the communities in which it operates; and demonstrating the highest principles of corporate governance.
Arch is a demonstrated leader in mine safety, with an average lost-time incident rate during the past five years that is more than 2.5 times better than the industry average.
In the environmental arena, Arch subsidiaries achieved a near-perfect compliance record in 2022, with just one Notice of Violation (NOV) from state mining regulators. In 2021, Arch had zero NOVs, and has averaged fewer than one per year over the past five years, versus an average of approximately 15 annually by 10 other major U.S. coal producers. In the area of water management, Arch subsidiaries took more than 100,000 water quality measurements in 2022 and recorded zero exceedances for a 100 percent compliance record. Arch and its subsidiaries have now operated more than three years without a water quality exceedance.
In May 2021, Arch joined ResponsibleSteelTM, the steel industry’s first global not-for-profit multistakeholder standard and certification initiative. Arch is the first and only U.S. metallurgical coal producer to join the organization to date. Arch views ResponsibleSteelTM as an important forum for collaboration with its steel-making customers as they pursue a more sustainable value chain, and as they seek to lower — and ultimately reduce to zero — the carbon intensity of the steelmaking process.
Enterprise Risk Management
The evaluation and management of risk is incorporated into Arch’s approach to governance and risk management. Arch uses a long-standing Enterprise Risk Management (ERM) process to assess risks that may affect the company’s ability to achieve its strategic and financial goals. The ERM process, which is overseen by the company’s board of directors and administered by senior management, cultivates a risk-aware corporate culture at Arch.
Our objective for environmental, social, and governance (ESG) performance is to work towards positive outcomes for our business and stakeholders. Our process for integrating risk management throughout the business includes identifying, evaluating and addressing ESG risks and opportunities on a regular basis. The risks and impacts associated with our business require effective collaboration among departments, business units and external stakeholders.
Because the company’s environmental and operational activities are inextricably intertwined, our chief operating officer acts as our environmental lead with the assistance and support of the company’s entire operational and environmental leadership teams. The COO reports directly to the chief executive officer, who provides further oversight and direction in this critical area of performance, and both the COO and the CEO report to the board of directors on critical areas of environmental performance and on key environmental metrics, at a minimum, as a part of every regularly scheduled board meeting. Our senior vice president of strategy leads the company’s broader ESG efforts, reports directly to the CEO, and reports to the board of directors and the Environmental, Social and Governance Committee (the “ESG and Nominating Committee”) of the board on a regular basis.
Compliance Management System
For more than a decade, Arch has been operating in conformance with a Compliance Management System (CMS) that was modeled after the ISO 14001-2015 Environmental Management System standard and that met EPA’s rigorous expectations for the company’s compliance assurance program. Under our CMS, we require each subsidiary facility to maintain full compliance with applicable environmental regulations and to monitor that performance in alignment with the “management plan” model of Plan/Do/Check/Act. Each operation regularly reviews its applicable regulatory framework and its environmental operating risks, ranks those risks and mitigates accordingly. Each operation regularly performs self-evaluations of compliance performance, and those self-evaluations are supplemented by corporate environmental compliance and third-party assessments, undertaken to reduce the risk of noncompliance and environmental harm. The CMS is designed to drive continuous improvement, with emphasis on risk reduction and environmental performance improvement.
Annual environmental action plans are developed by each facility and incentives for outstanding environmental compliance performance are awarded. Underpinning the overall environmental program, Arch uses an industry-leading environmental management information system (EMIS) to assist in managing and tracking environmental data; compliance obligations; audit findings and corrective actions; and regular internal reporting of environmental activities. Arch continues to build out the capabilities of its EMIS to improve the efficiency of compliance assurance and to reduce risks of environmental harm.
Third-Party Oversight
Arch dedicates significant operational resources to all aspects of environmental compliance assurance and risk management in an effort to enable environmental regulations to be fully addressed and to enable environmental resources to be protected. Beyond daily attention to such details, Arch engages third-party experts to review the work of our operations in order to provide additional, external assessment that the practices and compliance measures we employ are accurate and reflective of industry standards and best practices.
Examples of operational areas to which Arch applies regular third-party review and assessment include:
- Design, construction, operation, maintenance and monitoring of refuse management areas, including both slurry impoundments and dry piles
- Design, construction, operation, maintenance and monitoring of refuse slurry pipeline systems
- Deployment and implementation of the Arch Resources Environmental Management System
Each year, Arch retains a third-party consultant to conduct an extensive and comprehensive review of its operating, safety and environmental practices. In each of the past three years, Arch has retained a leading global loss control engineering firm for the mining industry to conduct this assessment at each of the company’s subsidiary operations. While the results were highly positive, with no “critical recommendations” of any kind, the extensive individual mine reports — which typically exceed 100 pages — identified multiple opportunities for improvement. Arch and its operating subsidiaries have put these recommendations to use in making enhancements to their critical operating, safety and environmental processes, in keeping with the organization’s disciplined commitment to continuous improvement. The third-party consultant also conducted separate refuse facility reviews to assess Arch’s management systems relative to the Global Industry Standard on Tailings Management
In addition to third-party assessments, each facility is continuously subject to regulatory inspections, with regulators such as the U.S. Department of Labor’s Mine Safety & Health Administration (MSHA), which has inspectors at each of our mines on an almost daily basis. In 2022, Arch’s operations were subject to 2,179 inspection shifts by MSHA.
State regulators overseeing the federally delegated Surface Mining Control and Reclamation Act (SMCRA) programs are required by regulation to perform monthly inspections at a minimum, but many of our facilities have weekly or even more frequent inspections. Arch Resources maintains one of the best SMCRA compliance records in the industry, with an average of less than one violation per year across the entirety of the company over the past five years. In 2022, Arch’s operations were subject to 1,310 inspections by federal and state inspectors.
Other federal and state regulators randomly perform compliance and oversight inspections, including regulatory inspections required under the Clean Air Act (air permits), the Clean Water Act (NPDES permits) and the Resource Conservation & Recovery Act (waste management), as well as inspections required by the U.S. Nuclear Regulatory Commission (nuclear sources) and the U.S. Alcohol, Tobacco, Firearms and Explosives agency (explosives management). In addition, Arch operations routinely conduct inspections with state fire marshals and local and regional emergency response coordinators, and conduct mine disaster drills at select operations.
Arch maintains its diligence on all matters of environmental and safety management by performing corporate compliance and best management audits across all subsidiary facilities. The corporate management team provides both the guidance on requirements for full compliance, and periodically makes site visits to review practices; documentation and recordkeeping; and external reporting. All of these oversight efforts are welcomed and encouraged by our subsidiary facilities and management teams, who recognize that additional eyes and expertise engaged in reviewing our practices and compliance efforts act to further reduce risk and to maintain diligence in protecting the environment.